Chief executives, not the City, are to blame for the failure of engineering firms to secure long-term investment in engineering R&D, according to former British Energy and Nuclear Electric chief executive Dr Robert Hawley.
Hawley was summing up the findings from six seminars on R&D for Industry held over the past year by the Royal Academy of Engineering.
He said the City has been unfairly blamed for lacking a long-term view of the needs of engineering and high-tech firms to invest in research and development.
The fault lies with chief executives who have failed to communicate their company strategy and the way R&D fits into it, he claimed.
‘Companies need to improve the communication of their R&D strategy to the City,’ he said. Prescriptions that R&D should be a certain percentage of turnover missed the point, he said.
Hawley said the purpose of R&D is to beat the competition and, therefore, should fit into a corporate strategy.
‘If they have a strategy into which R&D fits, chief executives should be capable of explaining it to the City,’ he said.
‘It is the job of the chief executive, not the R&D director,’ he said. ‘The City should be capable of assessing the strategy.’
The seminar for industry leaders and academics on the City’s view of R&D had changed perceptions, Hawley said.
‘Before we started, there was a general perception that the City didn’t take a long-term view. We got people along from the City who convinced people they were entirely wrong.’
City firms were increasingly taking on people with science and engineering backgrounds, and were capable of understanding that an R&D strategy might depress profits temporarily, with the promise of a pay-off in the long term.
‘Some companies haven’t thought their strategy through sufficiently,’ Hawley said.
Opinion, page 12